Advancing Agribusiness Value Chains through Farmer Producer Organizations: A Critical Review of Opportunities, Constraints and Policy Support
Battala Sheshagiri
*
Department of Agricultural Economics, Naini Agricultural Institute, Sam Higginbottom University of Agriculture, Technology and Sciences. Prayagraj, Uttar Pradesh, India.
I Gopi Naik
Department of Agribusiness Management, Synergy School of Business, Hyderabad, India.
Chintada Sneha
Agricultural Extension, KBR College of Agriculture (Affiliated to ANGRAU) C.S. Puram, Andhra Pradesh, India.
Steffi Palaparthy
Agricultural Extension, KBR College of Agriculture (Affiliated to ANGRAU) C.S. Puram, Andhra Pradesh, India.
Alok Kumar Pandey
Department of Agricultural Economics, Naini Agricultural Institute, Sam Higginbottom University of Agriculture, Technology and Sciences. Prayagraj, Uttar Pradesh, India.
Shristi Chakraborty
University of Agricultural Sciences (UAS), Raichur, Karnataka, India.
Shubham Kumar
College of Agri Business Management, Bihar Agricultural University, Sabour, Bhagalpur, Bihar, India.
*Author to whom correspondence should be addressed.
Abstract
Farmer Producer Organizations (FPOs) have emerged as important institutional mechanisms for strengthening agribusiness value chains and improving the socio-economic conditions of small and marginal farmers in developing economies. This review critically examines the role of FPOs in enhancing market participation, collective bargaining, value addition, and sustainable agricultural development. The study is based on a comprehensive review of secondary literature, including academic journals, institutional reports, and policy documents related to agricultural commercialization, collective action, and rural development. The findings indicate that FPOs contribute significantly to reducing transaction costs, improving access to quality inputs, strengthening market linkages, and facilitating financial inclusion for farmers. FPOs also encourage value addition, rural entrepreneurship, women’s empowerment, and climate-resilient agricultural practices. However, the review identifies several challenges affecting their long-term sustainability, including weak governance, inadequate managerial capacity, limited infrastructure, insufficient institutional finance, and policy implementation gaps. Comparative evidence from India and other developing countries further highlights the importance of professional management, digital integration, and strong institutional support in ensuring successful FPO performance. The study concludes that well-supported and efficiently managed FPOs can play a transformative role in building inclusive, competitive, and sustainable agribusiness value chains.
Keywords: Smallholder farmers, agricultural commercialization, market linkages, rural entrepreneurship, sustainable agriculture